Thursday, August 7, 2008

Walmart: Stimulus check stimulus is gone

The market is throwing an early morning hissy fit again. The three data points for today's opening are Walmart's warning, Iran nuclear program "tensions" and the attendant higher oil and AIG's writedowns.

The market needs AIG to pull a Merrill Lynch, and rally after the writedowns. It's trading under 26 pre-market. I'll take a shot on AIG by taking the stock here, and by buying the Aug 28 calls when they crush them at the opening, especially if I can pick them up at .30 or .40 cents.

Higher oil? That's the easy one to reverse. 48% of the open interest in NYMEX crude is controlled by speculators. Throw some more money at this bad bet, and bid up oil, and let CNBC breathlessly report the tensions in Iran.

In FL, we didn't have a tax free sale, but JC Penney gave their own with a 6% discount. The crowds at JCP showed that the consumer is still tight. At least the retail story is "honest." Oil isn't.

I'm betting this morning "hissy fit" won't last.


bob said...

AIG is not on the –Do not naked short list-

MER was on that list- there is plenty of speculation that this was why MER was not taken out to the slaughter house.
Many believe that if MER wasn’t on that list- they would never have been able to sell that last block of stock at a decent valuation.

palmoni said...

yeh that's true but the conference call was is turning into an investment